Some experts believe the housing market decline will hit regional executives particularly hard as mortgage demand plummets to its lowest level in 25 years. Pandemic-era hotspots and other areas where affordability has plummeted will push prices down as much as 20% of him. Even if there is a wider housing market floating around.
Data showed mortgage applications plunged 14.2% in the seven days to Friday from a week ago, pushing overall applications to their lowest level since 1997. release Wednesday by the Mortgage Bankers Association.
The rate of rapid increase is tucked In the past six weeks alone, a typical monthly mortgage payment has risen by $337, or 15%, resulting in a sharp drop in demand for housing nationwide.
The median home sale price rose 7% over the past year to $369,250, according to real estate broker Redfin, while prices in San Francisco fell 4%, while neighboring Oakland and New Orleans fell 0.5%. dropped 11%. Respectively.
While he doesn’t expect a nationwide adjustment, Tejas Joshi, director of investment firm Yield Street, said house prices could fall by 20% in some regional markets where new home construction boosts supply. I expect there to be slash Areas such as Dallas, Texas, Austin, and Boise, Idaho will see prices “aggressively” increase in the coming months.
He also said that adjustments in pandemic-era hotspots that have seen an influx of new residents in the past two years, such as Phoenix, Austin and Las Vegas, have worsened, exacerbating affordability concerns raised in some markets. I expect to let Western US—Vulnerable to a housing market correction, according to Goldman Sachs.
Goldman notes that 9% of active listings are cutting prices on Zillow (mainly in areas where prices have risen sharply during the pandemic), including Seattle, San Diego and Los Angeles. suggests less affordable areas, such as western cities in —is most susceptible to adjustments, but the more affordable metros in the South may be better suited to avoid adjustments.
Goldman’s chief credit strategist Lotfi Karui says domestic house prices are likely to avoid a correction next year, but expects prices to fall in 39% of metropolitan areas. I’m here.
“It’s important to remember that much of the housing market data . . . is reportedly based on home purchases agreed over a month ago when mortgage rates were 1.5 percentage points lower,” Redfin said. says economist Taylor Marr. “Sellers should anticipate that buyers will be unwilling or unable to pay a similar price to what their neighbor’s house sold for a month ago.”
Other areas that may face less housing price adjustments are those with lower levels of new construction, Joshi said. For example, supply is “very low” in many markets in the Northeast, with most sales coming from second-hand homes, and homeowners are more likely to stay in a location longer rather than sell at a lower price. high, he points out.